THE EFFECT OF RURAL BANKING SCHEME ON THE ECONOMIC DEVELOPMENT OF EDO STATE: A CASE STUDY OF OVIA NORTH EAST LOCAL GOVERNMENT AREA
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THE
EFFECT OF RURAL BANKING SCHEME ON THE ECONOMIC DEVELOPMENT OF EDO STATE: A CASE
STUDY OF OVIA NORTH EAST LOCAL GOVERNMENT AREA
ABSTRACT
The purpose of this
study is to examine the effect of rural banking scheme on the economic
development of Edo State, with emphasis on Ovia Local Government Area , Union
Bank, fidelity Bank. The overriding problems in Nigeria whish affect the
development of rural banking are the underdeveloped and poorly adopted
financial practices which prevailed in the country. Furthermore, the project is
also to take a look at the extent to which rural banking has been able to meet
the needs of the people through their lending policies to finance project.
Chapter one gave the insight of the background, statement of the problem
objectives of the study, the method used in collection and analysis of data.
Definition of terms and scope and limitation of the study. The second chapter
deals with literature review. Chapter three describes the design and
methodology, while chapter four reveals the data analysis and interpretation.
The study was then summarized in chapter five, conclusion and policy
recommendations were made.
TABLE
OF CONTENT
CHAPTER ONE
Introduction
Background to the
study
Statement of problem
Objectives of the
study
Significance of study
Research questions
Scope of the study
Limitations of the
study
Definition of terms
CHAPTER TWO
Review of related
literature
CHAPTER THREE
Methodology and
procedure of study
Research design
Population of the
study
Sampling of the study
Sample technique
adopted
Instrumentation
Method of data
collection
Method of data
analysis
CHAPTER
FOUR
Presentation of data
and discussion of results
CHAPTER FIVE
Summary, Conclusion
and Recommendation
BIBLIOGRAPHY
QUESTIONNAIRES
CHAPTER
ONE
INTRODUCTION
BACKGROUND TO THE STUDY
In West Africa before the advent of the European, trade by barter was a
phenomenon of the economy. The early stage of monetary development in West
African was characterized by crude or primitive saving structures, where
valuables are personally hidden in placed not easily detected or kept with some
money lenders for custody. Although the term “banking” was not in use “savings:
had already been a part of the community. Thus, the idea of banking was not
completely foreign to the West African continent. The term “banking” come into
existence in Nigeria, with the advent of the European. The numerous advantages
associated with the banking institutions called for the rapid development of
the banking industry. According to Mobouway, Okaniyan, banks are important from
then point of view of economic development because they influence the
thriftiness of the community, assist in the mobilization of saving and channel
the savings mobilized into investment. Thus, as a result of this fast
development, the primitive peasant of West Africa economy was in no time transformed
into a modernized and commercialized economy. In view of banking advantages,
both the federal and the state budgets and policy speeches. The emphasis on the
need to develop the rural areas through the uses of rural banking in Ovia Local
Government Area was inaugurated in 1973 in other to help the rural dwellers who
mainly used other means of saving their money by lending it out to somebody.
Another means is that, they gather themselves and start paying any amount of
money to one particular person, this act is called “Osusu”. The rural banking
development programme is aimed at including the various commercial, merchant
and developmental banks to mobilize savings the fact that economic development
in the rural areas has been growing at a snail pace. Good enough, all of which
one factors in nation building. Taking a good look at the activities of Ovia
Local Government Area. This has to be in the mind of many people. The effect of
banking scheme in the rural areas. A careful study of the historical background
of the banking scheme will be a stepping stone into looking at the various ones
of activities performed by the bankers.
STATEMENT OF THE
PROBLEMS
Many people in the society have a questionable thought about the impact ogf the
rural banking scheme in the rural areas. The researcher has the belief that
banks one supposed to be the one of the instruments of the government that is
used in facilitating economical growth. In this approach, the government is
striving towards reviving the economy by focusing attention on the rural areas
of the country so as to promote agricultural activities, which in turn will
help to raise the standard of living in the country. The overriding problem in
Nigeria, which affects the development of rural banking is the underdeveloped
and poorly adopted financial practices, which prevail the country, commercial
banks in Nigeria have often concentrated their business in the urban areas,
they have not considered it necessary to set up branches in the rural sector.
Before the recent government efforts to bring banking facilities to the rural
areas, the alleged delay in securing an approval to establish rural branches
have not enhanced the provision of rural banking facilities in Nigeria. The
lack of banking facilities in the rural areas has also concentrated a major
obstacle in the way of rural banking in the traditional way, using institutions
such as the “Osusu” money lenders and daily savings collection and so it has
not been easy to develop orthodox banking habit in them. The resulting effect
shows that even after the establishment of the rural bank branches, the volume
of business activities still remain low. These factors inevitably discourage
bank from moving to the rural areas. Finally, the infrastructural facilities
such as pipe borne water, electricity,. Good road network, modern houses and
effective communication facilities are either not available. Thus, the bank
staff feels reluctant to say in such area or places. There is a general death
of skilled banking personnel.
PURPOSE OF THE STUDY
Nigeria like any other developing countries of the world is paying more
attention on how to accelerate the rate of her economic development. As a means
of achieving this purpose, there are avenues opened to the government to expose
its realization. Thus, the main purpose of this work is to look at the effect
of rural banking scheme in the rural areas of the economic development in Edo
State. The project is also geared towards findings out how the rural commercial
bank can mobilize savings from rural dwellers. Furthermore, the project takes a
look at the extent to which rural banks have been able to meet the needs of the
people through their lending policy to finance projects like agricultures, small-scale
indigenous business and government projects. The sum up purpose of this
research could be seen as follows;
1.
To determine the role of rural bank are playing in the overall economic
development of Edo State in all its ramifications.
2.
To determine the extent to which the rural banks in Edo State fulfill the loan
disbursement objectives in order to facilitates economic activities in the
state.
RESEARCH QUESTIONS
1.
For how long have you been dealing with this bank?
2.
What type of account do you operate with the bank?
3.
How long does it take you to open this account from the day this bank was
commissioned?
4.
If it takes you a long time to open this account what was responsible for the
delay?
5.
Have you ever asked the bank for a loan or overdraft?
6.
Was the loan granted?
SIGNIFICANCE OF THE
STUDY
Highlight of some of the major areas of economic development in Ovia Local
Government Area. Will provide the background information to interested
individuals such as ministries of economic development. The study will also
help in bringing about some of the problem facing bank operation in the area
relevant to staff in particular and the customers in general. Finally, the findings
of this study will serve as a take off for subsequent researchers who would
like to carryout similar studies.
SCOPE OF THE STUDY
At the completion of this research work, the researcher hops to successfully
come up with solutions to the following investigations.
1.
To find out how successful the programme has been executed.
2.
To determine whether and to what extent the scheme has promote the development
of the rural areas economically.
3.
Also the researcher will be able to examine the various problems faced with
this programmes and to suggest possible solution.
DEFINITION OF TERMS
These words or group of words have been used in the course of writing the
research. These words of the reader. So to make the reading more meaningful the
words have been defined especially as it relates to the research topic.
Rural area:
underdeveloped area dominated by agriculture.
Banking: This is the
act of collecting saving of money and assisting people in terms of facilitating
financial exchange.
Scheme: Systematic
arrangement proposed for executing a plan of action.
Rural banking scheme:
A plan by the government, through the central bank to effect the establishment
of commercial banks in various local government area in the country.
Money: Anything,
which is generally accepted in the exchange or for the settlement of debt.
Barrier economy: A
society where there is a total absence of monetary transaction.
Economic development:
The total transformation of the mode of doing things both economically and
politically.
Economic growth: If
good and services production in a given period increased from year to year when
measured by the total goods and service produced in given period.
Indigenous bank:
banking institution owned and controlled by the citizen of the place in which
such a bank is located.
Alternatively it is a
banking institution where the majority of shares are owned by the citizens of
the place in which the bank is located.
Infrastructure:
Infrastructures refers to all installations usually found in bank in form of
technological development that will enhance the work performed as distinct from
all manual operations.
Rural inhabitants:
These are those people who make their living in the rural areas.
Standard of living:
It means the extent to which make their living in the rural areas. Also one can
satisfy its wants. But when only able to satisfy its basic needs such as food
and shelter.
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